Q:
Ben is employed by the underwriter of the PCO mutual fund. His job is to visit broker-dealers which distribute the mutual fund and encourage the registered representatives to sell the fund’s shares to their customers. As a part of his “wholesaler’s” job he typically gives reminder-type gifts to representatives, and sponsors incentive contests for tickets to sporting events. Which of the following would be violation of the NASD Rules regarding gifts?
I. An insulated coffee mug bearing the fund’s logo
II. A watch with the fund’s logo, valued at $125
III. A pen and pencil set with the fund’s logo, valued at $50
IV. Season tickets to an NFL team’s games

   
A) II only
B) IV only
C) II, IV
D) II, III, IV
A:
The correct answer is C)
NASD Rule 2710 addresses what has been called “special deals”. While gifts of $100 or less per year and “occasional” tickets to sports and social events are permitted, season tickets and the $125 watch would not be allowed.

RELATED FAQS

  1. If I have only a limited amount of time to study for the Series 6, what should I ...

    Learn what to focus on when studying for the Series 6 while reviewing important aspects of the exam, including its content ...
  2. What role does the 'chip cycle' play in the electronics sector?

    Read about some of the best and most popular test prep classes for the Series 6 FINRA securities licensing exam, including ...
  3. What does passing the Series 6 enable me to do?

    Learn more about the Series 6, what the examination and license are and what the license enables an individual to buy, sell ...
  4. What are the differences between the Series 6 exam and the Series 7 exam?

    Learn about the regulatory exams needed to become a limited or registered representative and the main differences between ...
RELATED TERMS
  1. Series 79

    A examination to ensure a candidate is qualified to become a ...
  2. Research Analyst

    A person who prepares investigative reports on equity securities. ...
  3. Series 34

    An exam required for individuals seeking to engage in off-exchange ...
  4. Financial Advisor

    One who provides financial advice or guidance to customers for ...
  5. Series 23

    An exam offered by the Financial Industry Regulatory Authority ...
  6. Series 28

    An exam given by the Financial Industry Regulatory Authority ...

You May Also Like

Related Articles
  1. Professionals

    Top Strategies on How to Become a Stock ...

  2. Professionals

    Should You Add A Securities License ...

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!